Dallas/Fort Worth BiggerPockets October Meetup Speaker!

Local Real Estate Networking

Dallas/Fort Worth BiggerPockets October Meetup Speaker!

Kathy Armstrong

Real Estate Agent · Keller, TX · Member since 2011 · 133 posts · 11 votes

Hey everybody! I am so happy to announce our October speaker will be Mitch Stephens from San Antonio, author of the book My Life & 1,000 Houses Failing Forward to Financial Freedom. He will be driving all the way from San Antonio just to tell us his remarkable story!

A self-taught real estate entrepreneur. Self-employed since 1996, Mitch Stephen has purchased well over 1000 houses in and about his hometown of San Antonio, TX. A high school graduate, who never stopped learning. Books, CDs, seminars and webinars were his classroom.

Today he specializes in owner financing properties to individuals left behind by traditional lending institutions and giving new life to properties that scar the neighborhoods.

He has perfected a method of achieving cash-flow without having to be a landlord and without having to rehab properties. He’s mastered the art of raising private money and the classic “Nothing Down” deal.

He has pioneered the idea that you don’t have to give discounts to sell your notes.

A passionate speaker who delivers the message of integrity first and profits second; an expert at keeping it simple and explaining, in plain English, the theories that made him financially independent. He is always an inspiration to those around him.

Come hear Mitch, Friday, October 25th at Springcreek Barbeque 3514 W Airport Fwy, Irving, TX 75062 at 7:00. Mitch will speak at 7:00 so get there early to get your food and network.

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Most Popular Reply

Dallas, TX · Member since 2013 · 4k+ posts · 744 votes

13y

Kathy,

I agree he is a nice guy but don't you think if you are teaching about "Nothing Down" deal and someone is willing to pay you to hit the street with them and show what you are teaching can happen in the real world I think if it is not hype the teacher should say let's go. I will show you.

Joe Gore

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Sharon Vornholt
Goshen, KY · Member since 2009 · 835 posts · 683 votes
13y
I don't know what he is doing now, but he told me a couple of years ago that he had a person on his team that was a licensed mortgage person. I'm not sure how all of that worked.

Sharon
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Sharon Vornholt
Goshen, KY · Member since 2009 · 835 posts · 683 votes
13y
@Kathy Armstrong - How was your meeting last night?

Sharon
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Kathy Armstrong
OP
Real Estate Agent · Keller, TX · Member since 2011 · 133 posts · 11 votes
13y
@Sharon Vornholt

@Sharon Vornholt
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Bill Gulley
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
13y
Owner occupied are exempt, selling your own home. Less than 5 appears to be exempt as well. If the property isn't residential it's exempt. You can do a thousand residential deals as a seller, just comply with the requirements. You can buy a thousand residential properties without compliance issues.

The Act includes any method or strategy that is employed in order to avoid the intent of the Act. Forming an LLC to sell residential properties to consumers can certainly be seen as an attempt to avoid the Act by calling it a "commercial transaction or loan" that would not be a commercial loan. I'll bet those that "investors" that dream up ways to circumvent requirements have little experience in financing or compliance. I'd say caution needs to be taken when you're told "my attorney said this is good"......his attorney will defend him, (or they may weasel out of it when they discover they were wrong) they have no obligation to defend you. You'll have no recourse.

Now, if anyone has a real solution, I'd sure like to hear it as well! :)
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Sharon Vornholt
Goshen, KY · Member since 2009 · 835 posts · 683 votes
13y
Investor to investor deals are also exempt.

Sharon
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Bill Gulley
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
13y
Myth, don't rely on that as you need to look to state law, the intent of use, the maker's business use, property type and how regulators will slot or classify the loan. ABC, LLC to XYZ LLC may not meet the requirements, but granted, it's a good start. ABC, LLC to Joe Investor is not getting off on the right foot.

Installment contracts can redefine the use of funds when your investor borrower sells.

Such matters don't really pop up that much until something goes wrong, death, bankruptcy or tax matters, and such where issues arise and then it's found that the use or intent was different or not in compliance. I doubt such become issues for regulators. More often any action where a borrower is involved, their attorney may attempt to classify the loan so that other rules apply, like redemption rights or exemptions, especially if that investor moved in, then other issues arise like usury and noncompliance. Lender's need to pay attention and obtaining a statement as to the intent and use of the secured property is highly advised. :)
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Grant Kemp
Investor · Dallas, TX · Member since 2012 · 158 posts · 99 votes
13y
@Sharon Vornholt investor to investor deals are not exempt, usually. There are some very specific scenarios that could be exempt (like transferring a loan between companies you have ownership in), but let's just say it's not exempt for the sake of simplicity and erring on the side of safety.

@Joe Gore I'm tagging you so you see this reply

@Bill Gulley processing your buyer through an RMLO is how to satisfy legal compliance with this stuff

Ok guys, lots of misinformation about SAFE act seems to be going on here. You are allowed to do owner financing even with more than 5 properties in a rolling 12 month period, you just have to process your buyer through an RMLO (Residential Mortgage Loan Originator). Having your buyer processed by the RMLO satisfies your SAFE act compliance needs (as long as your RMLO knows what they're doing)

Exemptions from safe act:

Owner occupant to Owner occupant

Condominiums and Mobile homes

People who do less than 5 transactions in a ROLLING 12 month period

People that are allowed to collect the 1003 loan app:

Those who are listed above

Real estate agents representing the owner occupant seller

Attorneys representing the owner occupant seller

Seller financing is a very good strategy for great risidual income and great up front profits, but you have to be aware of the Dodd-Frank act, the S.A.F.E. act, and RESPA. Going through an RMLO with your buyer should keep you compliant on all fronts.

RESPA disclosures must be supplied, and with the owner financed interest rates they are typically above the 3.5% threshold (meaning the buyer is paying more than 3.5% above the APOR) given out to "small creditors" (i.e. people who do less than 500 loans a year and have less than $2 billion in assets the previous calendar year). For the big boys that are above that the "higher-priced" loan coverage is considered 1.5% above APOR. When doing a "higher-priced" (not "higher-cost" because there's a difference) there are some disclosures that need to be handed out (i.e. the TIL section 32 disclosure). But again, your RMLO should be satisfying these needs.

I hate to see so many people misinformed on owner financing on here, because it is a fantastic way to invest with little to no money out of your pocket. However, there's DEFINITELY a right and wrong way to do it. If you're going to do it, make sure to consult someone like Scott Horne (DFW real estate and title attorney) to get the right paperwork done.

We've done over 10,000 seller financed properties in this office over the last 25 years. It's definitely legal.

If you want to do more research on Dodd-Frank, S.A.F.E. act, Truth in Lending, RESPA, and the like you should visit the CFPB website:

http://www.consumerfinance.gov/guidance/
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Kathy Armstrong
OP
Real Estate Agent · Keller, TX · Member since 2011 · 133 posts · 11 votes
13y
Thanks, @Grant Kemp . You explained it so much better than I could since I am so new at it!
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Sharon Vornholt
Goshen, KY · Member since 2009 · 835 posts · 683 votes
13y
@Grant Kemp - My closing attorney has said on many occasions that investor the investor deals are exempt.

I did a blog post on this after he gave out the new guidelines at our REIA meeting. You can find those here: http://louisvillegalsrealestateblog.com/wp-admin/post.php?post=1723&action=edit

But this is what he said:
Who is exempt from the law?
Here are some other exemptions:

Sharon
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Sharon Vornholt
Goshen, KY · Member since 2009 · 835 posts · 683 votes
13y
Sorry - that was the wrong link.

http://louisvillegalsrealestateblog.com/new-safe-act-updates-from-hud

Sharon
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John Jackson
Investor · North Richland Hills, TX · Member since 2011 · 789 posts · 403 votes
13y
I have investors that do only seller finance, but the loan officer gets the 1003 and the attorney does the closing and all required docs and disclosures are covered.

I'm so grateful for the federal government for stepping in to real estate...boy..the real estate arena could have been in a real mess a few years ago with out them!!

WHEEE!!!!
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John Jackson
Investor · North Richland Hills, TX · Member since 2011 · 789 posts · 403 votes
13y
@Kathy Armstrong I don't know Scott Horn, but have heard his name quite a bit...you should see if he could come to speak sometime.

As far as the best nights to have a meeting, in my opinion, an out of area speaker doesn't care so much, but would prefer to be at home on the weekend with their family.

For local speakers and the attendees...normally a weeknight works best, as the same goes for them.... "honey..I can't to date night this Sat. night..I'm going to see John speak!!" doesn't always go so well.

You'll find of course you can't please everyone regarding schedules, but thanks for putting all of this together!!!
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Grant Kemp
Investor · Dallas, TX · Member since 2012 · 158 posts · 99 votes
13y
@Sharon Vornholt

Well, I'm certainly not infallible, and welcome correction, but I don't see any citations from that article and his video wouldn't load.

Here's a link to the safe act:

http://portal.hud.gov/hudportal/HUD?src=/program_offices/housing/rmra/safe/sfea

You can view the act itself by clicking the first link "SAFE mortgage licensing act"

Here's the HUD site that interprets the act and lays things out a little more clearly:

http://www.hud.gov/offices/hsg/ramh/safe/smlicact.cfm

You can see in section B where it defines who all is not required to be an RMLO under the SAFE act. I misspoke earlier citing condos, when I should've said timeshares. I really only deal with single family homes so any time condos/timeshares/mobile homes come up I've got to go researching to make sure we do it the right way.

As you'll see it explicity exempts only: Attorneys, People underneath an RMLO, Realtors/brokers, immediate family, and owner to owner transactions

Dodd-Frank act can be viewed here:

http://www.gpo.gov/fdsys/pkg/PLAW-111publ203/pdf/PLAW-111publ203.pdf

You'll wanna look at title XIV. You'll see in section 1401(2)e where it's further explaining the 3 homes in a rolling 12 month rule. I believe that was amended, but whether it be 3 or 5 we always recommend everyone run ALL buyers through the same processing to be safe.

I have never seen anything to exempt investor to investor unless he's qualifying that as under the 3 loans.

Either way...just run your buyer through the RMLO. Comply with the ATR standards and you'll be fine. I don't focus much on who's exempted because in my mind there's no reason to try and claim exemption when compliance is as easy as having an RMLO do the work.
1 Reply
Sharon Vornholt
Goshen, KY · Member since 2009 · 835 posts · 683 votes
13y
Grant - All I know is that the attorneys here have studied and reported on the SAFE Act of 2008 since the whole mess began.

Sharon
1 Reply
Grant Kemp
Investor · Dallas, TX · Member since 2012 · 158 posts · 99 votes
13y
well and like I said I could be wrong too, and always welcome a learning opportunity, but I'm providing citations and I'm also an RMLO who's partners with a real estate attorney.
1 Reply
Grant Kemp
Investor · Dallas, TX · Member since 2012 · 158 posts · 99 votes
13y
*i hope I didn't come off like a jerk there. I'm just saying there's a lot of information that gets thrown out about these laws, but unless I see it backed up by an official government document I have to take it with a grain of salt.
1 Reply
Onan Dumas
Investor · Rowlett, TX · Member since 2013 · 132 posts · 72 votes
12y
Man....I'm just excited to meet more people...How about that?!?! LOL see you guys and gals there
1 Reply
Grant Kemp
Investor · Dallas, TX · Member since 2012 · 158 posts · 99 votes
12y
By the way, my head is clearer now so I wanted to clarify something:

the 3 property in a rolling 12 month exemption is to exempt from the TILA

the 5 property in a rolling 12 month is what exempts you from SAFE
0 Reply
Bill Gulley
Investor, Entrepreneur, Educator · Springfield, MO · Member since 2009 · 21k+ posts · 12k+ votes
12y
Correct Grant, now this thread is going much better for you. :)

Investor to investor deals can later be out of compliance if the buying investor allows the assumption in some installment loan as it may the be seen as a method or scheme to circumvent the intent of the Act.

If the property is residential covered property, it's just best to comply with a MLO or attorney.....another option is to sell to a non-profit and let them do it, another exemption, but most won't go there.

I really wouldn't ask closing attorneys or title attorneys about loan compliance as that is not their area of expertise and I'd say most will skim the regs of the day and base much of an opinion on RE experience, which is not the same thing.

Call a small local bank, tell them you have a need for a financing type attorney and ask who they use in town or in the region. Larger banks will have one of their own so that won't help much.
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Alexander Bustos
Irving, TX · Member since 2013 · 125 posts · 7 votes
12y
Wow, woa, Wow :D

So much conversation!! Isn't it just fantastic? Ha.

We look forward to seeing everyone at this next meet up! If you have any ideas or want to make any suggestions for the future meet ups, plz let us know.

Take care everyone!! And remember! Spread the word! We have to keep this growing! I don't want this meet up to just be something we did for a few months in a row. So we need everyones help to keep this growing!

We are probably going to have a SOCIAL MEET UP for the month of December! Mix things up a bit! Probably will be on a WED :D

Take care everyone!!
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Kathy Armstrong
OP
Real Estate Agent · Keller, TX · Member since 2011 · 133 posts · 11 votes
12y
Okay, everybody! I hope I see you tomorrow night at the DFW BiggerPockets meetup in Irving. I believe Mitch will be an entertaining speaker that will offer a lot of education and some creative ideas for your business. If you have read his book you know Mitch was awarded for founding the San Antonio REI which is over 800 members strong today providing investor education events. So he knows a little bit about real estate investing and networking. Let's have a great turn out for Mitch since he is driving all the way from San Antonio just to share with us! See you there!
1 Reply
John Jackson
Investor · North Richland Hills, TX · Member since 2011 · 789 posts · 403 votes
12y
Well this stinks...but I can't make it tonight....I was REALLY looking forward to it, with meeting everyone and meeting Mitch etc.

Sometimes life throws you a curveball... @Kathy Armstrong I deeply apologize I can't make it, but thank you for putting all of this together.

You and I live 15 min. from each other...we should meet next week!

I'm really disappointed as I was looking to meet everyone and network.

Kathy, let's meet and I'd be happy to help organize any other get togethers.
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Kathy Armstrong
OP
Real Estate Agent · Keller, TX · Member since 2011 · 133 posts · 11 votes
12y
Originally posted by John Jackson:
Well this stinks...but I can't make it tonight....I was REALLY looking forward to it, with meeting everyone and meeting Mitch etc.
Sometimes life throws you a curveball... @Kathy Armstrong I deeply apologize I can't make it, but thank you for putting all of this together.

You and I live 15 min. from each other...we should meet next week!

I'm really disappointed as I was looking to meet everyone and network.

Kathy, let's meet and I'd be happy to help organize any other get togethers.

So sorry you can't make it, John! I was looking forwards to you being there! Mitch is already in town and I know he will have some great info to share. I would be happy to meet you next week. I will email you.
0 Reply
Kathy Armstrong
OP
Real Estate Agent · Keller, TX · Member since 2011 · 133 posts · 11 votes
12y
I forgot to put @John Jackson
0 Reply
John Jackson
Investor · North Richland Hills, TX · Member since 2011 · 789 posts · 403 votes
12y
I really hate to miss tonight...

It's a major disappointment for sure but I found out this AM that I needed to be here so one of those situations where you have to set your priorities.

Let's try to meet in the next week, and I'd like to get Mitch's contact info as well.

I doubt you can record tonight given teh venue, but if you can, that woudl be great.
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